CEO's Regret #3: Not Trying to Go Public Sooner

Behind every successful CEO probably lurks at least one major regret. The best, or the luckiest, CEOs learn from their mistakes and get an opportunity to rectify them. But as we learned from the stories that company founders shared with us, even the ones who get a second chance can still feel the repercussions from their moves for years afterward. And the lessons they gleaned stay with them and influence their business decisions in sometimes surprising ways.

Bob Carroll is an entrepreneur who values his independence. The CEO of TelStrat, who had years of experience in engineering and management and another start-up under his belt, was determined to keep the business in the family. In 1993 he'd "started it as a private company," he says, "and I wanted to keep it that way. I wanted the autonomy."

He brought his two adult children into the business two years later and, he says, "the plan was to have them take over." But within the past six months, all that has changed. "With all the dot-com competition, it's hard to motivate and retain good talent," says the 56-year-old Carroll. "They've got stars in their eyes about stock options." So he now has to switch directions and head for the public markets. "If I had decided to do this from the start, it would have been easier," he says.

Carroll has been working almost exclusively with one customer, telecommunications giant Nortel, in designing, manufacturing, and private-labeling added capabilities for the company's systems, but he now feels he must expand his customer base. That will cost him in terms of profitability because of the investment he must now make in marketing, and in research and development for individual customers.

Mostly, though, he feels he may have missed the best IPO market for a long time to come. "Had I positioned myself to go public, I could've gone public one or one and a half years ago. I missed a great window," says Carroll. "We had a 200% growth rate, and we had a lot of cash. All I really needed to do was to have a good story. It would've been an easy sell." Instead, he now plans to go public in two or three years, depending on what the market looks like when he's ready.

So why didn't Carroll go public when he could have? "I had been part of public companies before and knew the pains you have to go through. I wasn't willing to make the trade-offs," he says. In 1987 he had started another business, Digital Techniques Inc., which became part of a public company. "I had the experience of dealing with shareholders, with a board. I had enough of that. Now I'm chairman of TelStrat. For a while I was the only officer. Then I added my kids and my president. And that's it. There's a minimum amount of interference," he says wistfully.